Preliminary Results -3-
May 18 2011 - 2:00AM
UK Regulatory
During the year Snowball and Tangent One have become
increasingly integrated, and as such, the Board instigated the
formal integration of the business development and account
management teams within these units. In addition to this, further
consolidation of Tangent's print revenues into its Newcastle site
was undertaken. Both of these restructuring efforts resulted in
redundancy and termination costs. As these costs do not form part
of the normal operating expenses of Tangent they have been included
within non-operating expenses.
The Board believes that it is in the interest of both
shareholders and the Company for Tangent to have the ability to
purchase its own equity. To that end professional advisors have
been engaged to prepare the necessary documentation that would
enable the Board, when it is determined that it is appropriate, to
proceed with such transactions. As these costs do not form part of
the normal operating expenses of Tangent they have been included
within non-operating expenses.
Share based payment charges Share based payment charges for the
year ended 28 February 2011 amounted to GBP0.02m (2009-10:
GBP0.02m) and represents the fair value of options granted. As in
2010 this charge has been included within underlying operating
profit.
Taxation The charge of GBP0.28m (2009-10: GBPnil) equates to
26.5% of profit before tax. The charge differs from the standard
corporation tax rate of 28% as the group has expenses that are not
deductible for tax purposes and has recognised the value of its
deferred tax assets at 28 February 2011 part of which relates to
prior years.
Earnings Profit for the year, after tax, was GBP0.78m (2009-10:
GBP0.28m) equating to basic earnings per share of 0.45p (2009-10:
0.17p) and diluted earnings per share of 0.43p (2009-10:
0.16p).
Cash Flow Cash flow from operations was GBP1.83m (2009-10:
GBP0.64m) and tracked 35% ahead of underlying operating profit and
73% ahead of operating profit. Depreciation and amortisation
charges of GBP0.73m were the main reason for such high cash
generation relative to operating profit.
The major items included within the consolidated cash flow
statement are as follows:-
-- Tax payments were GBP0.10m (2009:10 GBP0.19m)
-- Capital expenditure of GBP0.90m was spent substantially on
the acquisition of digital printing and finishing equipment and IT
infrastructure
-- Dividends of GBP0.35m were paid, a new finance lease
amounting to GBP0.37m was raised during the year on the acquisition
of a digital printing press and GBP0.06m of finance leases were
repaid.
-- Over the period net funds increased by GBP0.79m to GBP1.93m
(2009-10: GBP1.14m)
Balance Sheet Net assets increased by GBP0.52m to GBP20.09m
(2009-10: GBP19.57m). The major movements related to the provision
of GBP0.30m in additional consideration for the acquisition of
Snowball, completed in 2009, the new finance lease and cash
generation as noted above. At 28 February 2011 current assets
exceeded current liabilities by GBP2.2m.
Dividends The Board believes that paying a dividend is an
important part of providing total shareholder return. To that end
we will recommend that the dividend is maintained at 0.2p per share
(2009-10: 0.2p) at the Annual General Meeting payable on 21
September 2011 to shareholders registered on 9 September 2011.
Treasury, Funding and Exchange Risk Tangent finances its
operations through funds raised from shareholders, retained
earnings and finance lease borrowings. In addition the group has a
variable rate GBP1m overdraft facility which has rarely been used.
Regular reports on cash balances and borrowings are provided to the
board. The majority of Tangent's trade is conducted in sterling
although a material amount is denominated in Euros and Australian
Dollars. The directors monitor exposure and where possible match
Euro and Australian Dollar denominated revenues and expenditure to
mitigate foreign exchange risk.
Kevin Cameron Finance Director
Consolidated statement of comprehensive income for the year
ended 28 February 2011
2011 2010
Notes GBP000 GBP000
------------------------------- ------ --------- --------
Revenue 22,394 18,185
Cost of sales (11,426) (9,620)
------------------------------- ------ --------- --------
Gross profit 10,968 8,565
Operating expenses (9,600) (7,726)
Share-based payment charge (17) (19)
------------------------------- ------ --------- --------
Underlying operating profit 1,351 820
Group restructuring expenses 2 (297) (542)
Operating profit 1,054 278
Investment income - 9
Finance costs (2) (5)
------------------------------- ------ --------- --------
Profit before tax 1,052 282
Tax (279) -
------------------------------- ------ --------- --------
Profit for the year 773 282
------------------------------- ------ --------- --------
Other comprehensive income
Exchange differences on translating
foreign operations 4 2
--------------------------------------- --------- --------
4 2
------------------------------- ------ --------- --------
Total comprehensive income
for the year 777 284
------------------------------- ------ --------- --------
Earnings per share (pence) 4
Basic 0.45 0.17
Diluted 0.43 0.16
------------------------------- ------ --------- --------
The results shown above relate entirely to continuing operations
and are attributable to equity shareholders of the company..
Consolidated statement of changes in equity for the year ended
28 February 2011
Share Share Merger Other Retained Total
capital premium reserve reserves earnings equity
Notes GBP000 GBP000 GBP000 GBP000 GBP000 GBP000
---------------- ------ -------- -------- -------- --------- --------- -------
At 28 February
2009 1,702 - 917 2,837 14,132 19,588
Comprehensive
income:
Profit for the
year - - - - 282 282
Other
comprehensive
income - - - - 2 2
---------------- ------ -------- -------- -------- --------- --------- -------
Total
comprehensive
income - - - - 284 284
Transactions
with owners:
Dividend 5 - - - - (338) (338)
Credit to
equity for
equity-settled
Share based
payments - - - 19 -- 19
Issue of shares 4 12 - - - 16
---------------- ------ -------- -------- -------- --------- --------- -------
Total
transactions
with owners 4 12 - 19 (338) (303)
At 28 February
2010 1,706 12 917 2,856 14,078 19,569
---------------- ------ -------- -------- -------- --------- --------- -------
Comprehensive
income:
Profit for the
year - - - - 773 773
Other
comprehensive
income - - - - 4 4
---------------- ------ -------- -------- -------- --------- --------- -------
Total
comprehensive
income - - - - 777 777
Transactions
with owners:
Dividend 5 - - - - (347) (347)
Credit to
equity for
equity-settled
Share based
payments - - - 17 - 17
Share to be
issued - - - 69 - 69
Issue of shares 42 - 457 (499) - -
---------------- ------ -------- -------- -------- --------- --------- -------
Total
transactions
with owners 42 - 457 (413) (347) (261)
At 28 February
2011 1,748 12 1,374 2,443 14,508 20,085
---------------- ------ -------- -------- -------- --------- --------- -------
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